U.S. Stocks Remain Mostly Lower In Early Afternoon Trading
After coming under pressure early in the session, stocks remain mostly lower in early afternoon trading on Thursday. With the drop on the day, the major averages have partly offset the rebound seen in the previous session.
Currently, the major averages are well off their lows of the session but stuck in the red. The Dow is down 132.30 points or 0.4 percent at 34,682.09, the Nasdaq is down 57.40 points or 0.4 percent at 15,104.13 and the S&P 500 is down 20.76 points or 0.5 percent at 4,459.94.
The weakness on Wall Street comes following the release of a report from the Commerce Department showing an unexpected rebound in U.S. retail sales in the month of August.
The Commerce Department said retail sales climbed by 0.7 percent in August after plunging by a revised 1.8 percent in July.
The rebound surprised economists, who had expected retail sales to decrease by another 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.
Excluding a continued nosedive in sales by motor vehicle and parts dealers, retail sales surged up by 1.8 percent in August after tumbling by a revised 1.0 percent in July.
Economists had expected ex-auto sales to edge down by 0.2 percent compared to the 0.4 percent drop originally reported for the previous month.
While the rebound in retail sales partly reflected a shift back to online spending amid the spread of the delta variant of the coronavirus, the resilience shown by consumers may encourage the Federal Reserve to follow through on plans to begin tapering its asset purchases later this year.
Recent signs of slowing economic momentum had generated optimism the Fed could delay tapering plans, allowing the central bank’s asset purchases to continue propping up stocks.
Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended September 11th.
The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week’s revised level of 312,000.
Economists had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week.
The modest increase came after initial jobless claims fell to their lowest level since March of 2020 in the previous week.
Gold stocks continue to turn in some of the market’s worst performances on the day, resulting in a 4.7 percent nosedive by the NYSE Arca Gold Bugs Index. The index has tumbled to its lowest intraday level in well over a year.
The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for December delivery plunging $39.80 to $1,755 an ounce.
Substantial weakness also remains visible among steel stocks, as reflected by the 2.6 percent slump by the NYSE Arca Steel Index.
Oil service stocks are also seeing considerable weakness amid a modest pullback by the price of crude oil, resulting in a 2.5 percent drop by the Philadelphia Oil Service Index.
On the other hand, airline stocks are among the few groups bucking the downtrend, with the NYSE Arca Airline Index climbing by 1.6 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.6 percent, while China’s Shanghai Composite Index tumbled by 1.3 percent.
Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index climbed by 0.6 percent, the German DAX Index and the U.K.’s FTSE 100 Index both edged up by 0.2 percent.
In the bond market, treasuries are extending the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3 basis points at 1.334 percent.
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